Biofuel expansion set to grow market for Canadian oilseeds

Canadians filling up their fuel tanks as they head out for summer road trips may not think about it, but biofuels – such as ethanol, biodiesel, and renewable diesel – help make the fun possible. Biofuels are blended with fossil fuels to produce the liquid that powers vehicles. Blending biofuels with fossil fuels can help improve fuel quality and reduce greenhouse gas emissions.

The drivers for biofuel demand and supply in Canada are influenced by federal and provincial policies as well as global factors – especially what happens in the United States. In the last five years multiple major corporations have announced plans to invest and expand biofuel production capacity. Even if some of these plans do not move through to completion, North American biofuel production is set to grow in the upcoming years. That’s bullish for Canadian oilseed producers.

Productivity is key for ethanol plants while renewable diesel capacity grows

Ethanol holds the title for largest biofuel produced (by volume) in the world. This is true in Canada as well where plants produce nearly 150 million litres of ethanol per month (Figure 1). In recent years, there have been no new ethanol plants built. However, production has increased over time as the existing plants focus on improving productivity by squeezing additional drops of ethanol from each tonne of grain. Canadian ethanol plants also produce small volumes of undenatured ethanol, used in applications like cleaning products and hand sanitizer (not included in this data).

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